Tom Womack

Halifax will sell me a 3-month bond paying 6.85%, a 6-month bond paying 6.5%, a 1-year bond paying 6.45%, a 3-year bond paying 6.4%, or a 5-year bond paying 6.2%.

I thought that longer terms were supposed to be rewarded by better interest rates; on the other hand, why shouldn't I jump at this?

If I assume that Halifax would rather borrow money on the money-markets, where LIBOR is 6.61%, than through the time-consuming process of assembling small sums from thousands of tiny savers, then I conclude that the money markets want to charge Halifax perceptibly more than 6.85%. I think that this means that they believe there is a chance of perceptibly more than 0.89% [(6.85 / 6.61) ^ (3/12)] that Halifax will be unable to repay.

On the other hand, I'm a small saver, and the regulatory framework likes small savers. If Lloyds lend Halifax fifteen million pounds, and Halifax goes bust, Lloyds get nothing back. If I lend Halifax fifteen thousand pounds, and Halifax goes bust, I get £13,700 back. So I should be more willing to lend Halifax money than Lloyds is - indeed, since the money is otherwise making 5.8%, I should lend it to Halifax if I believe the odds of Halifax still being around in mid-February are better than about 20:1 for.

This seems somehow counter-intuitive; on the other hand, I will go off to the local Halifax tomorrow with a chequebook. There is then the question of hedging: I wonder what odds the local Ladbrokes will offer on Halifax being bust by mid-February?

While idly looking for information about NASA's new class of nuclear power source for space missions, I came across something I've been looking for for ages: studies of the analogues of high-strength steels made using elements further down the periodic table. Whilst rhenium is readily purchased on ebay, the furnace requirements are unfortunately rather exacting for doing this work in one's back garden.

http://sakimori.nims.go.jp/documents/990225b.html was the first one; the interesting bit of data is figure 1. MarM247, sitting there quite a long way under the red iridium-based lines, is a current best-available turbine-blade alloy.

http://sakimori.nims.go.jp/documents/001113a.html investigates four-element alloys, though the character-set information has been slightly mangled; http://nippon.zaidan.info/seikabutsu/2003/00916/pdf/igtc2003tokyo_ks2.pdf is a large but interesting overview article.

OK, there are some small pricing issues associated with making the blades for jet engine or power station turbines out of materials slightly more costly than platinum, but the design and machining costs are themselves large enough that even that class of material cost is not insuperable, particularly since a 500MW turbine produces electricity with a retail value of about a hundred thousand pounds per hour of operation and consumes, at the 33% thermal efficiency of Drax, 1200 tonsworth of CO2-emission permits which at one point cost 30 euros the tonsworth: that iridium is twice as dense as lead does make things a bit awkward, but increasing thermal efficiency significantly, so substantially reducing the weight of CO2-emission permits that you are burning an hour, might well be enough to break even.

What surprises me slightly is that all this research is in Japan, whilst if asked to name four jet engine manufacturers I'd list Rolls-Royce, General Electric, Pratt and Whitney, and then confess myself lost and try to Google up who Sukhoi and MIG's suppliers are. I suppose there are quite a lot of power stations in Japan, mostly built by Japanese companies, and that this has built up expertise such that the turbines in power stations worldwide may well be bought from Hitachi.